Oil prices stable as OPEC says market is rebalancing

Ivan Schwartz
October 12, 2017

Brent crude futures, the worldwide benchmark for oil prices, were up 6 cents, or 0.1 percent, at $55.85 a barrel.

Saudi Arabia and Russian Federation are now leading consultations between the Organization of Petroleum Exporting Countries and other major suppliers about the future of their agreement to cut oil output, Barkindo said Sunday in New Delhi.

The West Texas Intermediate for November delivery on Tuesday increased $1.34 to settle at $50.92 a barrel on the New York Mercantile Exchange, while Brent crude for December delivery rose $0.82 to close at $56.61 a barrel on the London ICE Futures Exchange.

OPEC Secretary-General Mohammed Barkindo called on U.S. shale oil producers to help support plans to curb global oil supply on Tuesday, warning that unprecedented measures may be necessary next year to rebalance the oil market.

"Oil prices are expected to remain at $50-55/b in the next year", Opec said. The production cuts have led to a decline in crude inventories and a better balance in the oil market, he said. "I don't think there are many losers out there".

Opec said it pumped 32.75 million bpd in September, up about 89,000 bpd from August.

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The agency forecast that 2018 crude oil output will rise by 680,000 barrels per day (bpd) to 9.92 million bpd.

OPEC said the world would need 33.06 million barrels per day (bpd) of its crude next year, up 230,000 bpd from its previous forecast. Good compliance with production caps, "strong" demand and slower-than-expected growth in USA shale output have helped accelerate the rebalancing, he said.

API said crude inventories rose 3.1 million barrels in the week to October 6. The American Petroleum Institute (API) is scheduled to release its data for last week at 4:30 p.m. EDT (2030 GMT) on Wednesday and the US Department of Energy's report is due at 11 a.m. EDT on Thursday.

Rob Haworth, senior investment strategist at U.S. Bank Wealth Management said OPEC and oil bulls were "hoping U.S. producers slow down production and make further progress on inventory cuts".

Iraqi government forces and Iranian-trained Iraqi paramilitaries are "preparing a major attack" on Kurdish forces in the oil-rich region of Kirkuk and near Mosul in northern Iraq, the Kurdistan Regional Government (KRG) said.

Other reports by GizPress

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